It has become something of a cliché to say that the short story is a neglected form in this country. But that doesn't mean it isn't broadly true. Thirty years ago, writers had many options when it came to placing stories. There were the serious literary journals, such as Ian Hamilton's New Review (in which much of Ian McEwan's early work was published). There were women's magazines, which used to devote what now seems an unthinkable amount of space to fiction (Cosmo had 12 pages per issue in the 1980s).

Nor did publications catering to more specialised tastes neglect the short story. At a recent launch event in west London, William Boyd recalled, with some pride, that one of his early stories was published in Mayfair. "I got £300 for it, and the editor took me out to lunch. I was delighted, though the picture they put with it was completely inappropriate."

All this meant that short stories were, for authors of Boyd and McEwan's generation, one of the main routes into a writing career. They combined being a way for writers to learn their craft with being a means of earning a modest income and of carving out a reputation. Today, short stories still have a pedagogic use - it's a form, after all, ideally suited to the creative-writing workshop. But because the market for them has largely dried up (magazines such as Granta and Prospect being honourable exceptions), they are no longer a commercially viable way for writers to establish themselves.

Just recently, though, there have been signs that the short story is regaining a toe-hold in the public consciousness. A few dedicated prizes have sprung up - including the National Short Story Award - and there is even a festival, Small Wonder, devoted to the form.

This year, too, some excellent debut collections have been published, among them Wells Tower's Everything Ravaged, Everything Burned, Daniyal Mueenuddin's In Other Rooms, Other Wonders, and Chimamanda Ngozi Adichie's The Thing Around Your Neck. None of these, it is true, represented a very great risk for their publishers: all are by non-British writers whose short fiction (and, in Adichie's case, novels) had already achieved international renown. Still, the attention they got may mean publishers take more punts on homegrown talent in future.

Another lifeline for the short story seems to be emerging in the unlikely form of the extra-literary institution. Last month, the Royal Parks published a set of eight specially commissioned stories, one for each of its London parks; contributors included Will Self (Bushy Park), Ali Smith (Regent's) and Adam Thorpe (Hyde). Explaining the rationale behind it, editor Rowan Routh said: "There's a kinship between parks and short fiction - both are confined things." Whether or not one agrees with this, the stories themselves were good enough to make the venture worthwhile.

Perhaps Park Stories really does indicate a road ahead for the short story, because now, courtesy of Britain's biggest charity, Oxfam, we also have the much more ambitious Ox-Tales. In conjunction with independent publisher Profile Books, Oxfam approached around 60 British and Irish-based writers, asking them to contribute (unpaid) a piece of short fiction inspired by one of the four elements. These roughly correspond with the four main areas of Oxfam's work: conflict resolution (fire), water projects (water), climate change (air) and agricultural development (earth). Thirty-eight writers submitted stories, extracts from novels in progress or, in the case of Vikram Seth, poems, and these have been collected in four volumes, each costing £5. As well as raising money directly, the charity hopes the project will increase awareness of its role as a bookseller: Oxfam has 130 bookshops in the UK, responsible for more than £1m of revenue per month.

A project like this brings dangers with it and so it's easy to be sceptical. There's the purist's objection that literature cannot be written to order and that, in any case, mixing it with politics of any stripe is never a good idea. There's the suspicion that any artistic venture backed by an NGO will prove unbearably worthy (the prospect of reading lots of stories about developing-world drainage projects is hardly thrilling). And there's the connected fear that the contributions, whatever their subject matter, simply won't stand up artistically.

Impressively, though, Ox-Tales' editors have sidestepped these pitfalls and the result is a triumph: four volumes of mostly outstanding fiction that would be worth reading whether or not an NGO was responsible for it. There are, it seems to me, two main reasons why it succeeds. First, and to their credit, a remarkable number of Britain's top writers have contributed, including (to name a few) Alexander McCall Smith, William Boyd, Zoë Heller, John le Carré, Sebastian Faulks and Beryl Bainbridge. The result is that these volumes, more than being simply a collection of short stories, act as a showcase for contemporary British fiction.

Second, and no less crucially, the editors have been deliberately lax in applying their "four elements" framework. Many of the stories could easily fit into more than one of the categories, while others have no discernible connection with their designated element. (This is particularly true of the "Fire" tales, most of which feature no combustion - at least of the non-metaphorical kind.) A few contributors, such as Michel Faber and Hari Kunzru, have tried to make their tales directly relevant to the concerns of Oxfam, setting them in an NGO milieu (Kunzru's story, about a meeting to set up an anti-malaria drugs project in Africa, is especially superb). Others, though, have ignored this side of things entirely, as is the case with Rose Tremain's delightful story about the death of Tolstoy, which seems wholly removed from the world of 21st-century poverty alleviation.

But this categorical slipshodness doesn't really matter; indeed, it is part of the point. If the "elements" framework had been more rigidly enforced, things would soon have become predictable.

Another thing that Ox-Tales does is provide a kind of snapshot of what currently interests our writers. Several of the stories - in some ways oddly, given that so much of Oxfam's work is directed at the underprivileged - offer a satirical take on the rich. Zoë Heller's "What She Did on Her Summer Vacation" - one of the most expertly crafted stories here - is a painfully funny coming-of-age tale about a teenage American girl on holiday in the Caribbean with her parents. Esther Freud's "Rice Cakes and Starbucks" explores broadly similar territory (middle-class Londoners setting up home in LA), while Sebastian Faulks's contribution, an extract from his forthcoming novel, adumbrates the world-view of a Notting Hill plutocrat.

Recent global financial events, then, are having some effect on our writers' creative output. Another recurring theme, no less predictable but in many ways harder to incorporate successfully into fiction, is that of a changing climate. A masterclass in this respect is offered by Helen Simpson's "The Tipping Point", the wry internal monologue of an English professor who, while driving to give a seminar in the Highlands, remembers an affair he had with a German environmental activist. It's a brilliant, subtle piece of writing that manages to subvert the usual pieties, recasting the concerns of the activist girlfriend as hysterically unreasonable ("You were in a constant state of alarm. I wanted you to talk about me, about you and me, but the apocalyptic zeitgeist intruded"). As such, it's a story that seems perfectly representative of this collection, which, despite the clear social agenda behind it, has little interest in enforcing the party line.

• Air, Water, Fire and Earth will be published as part of the first Oxfam Bookfest, which runs from 4-18 July and features more than 250 book-related events nationwide. Visit oxfam.org.uk/books for more details.